Wondering how to save money in order to buy a house? Excited to have a roof as your own? Well, we are here to demonstrate how to save money to buy a house.
It must be extremely wonderful to conquer your dream home. Buying a house is an important deal. Saving up for it’s down payment can be a daunting task. Well, with our strategies and some smart principles it will surely be easier for you to save up that amount. Get ready to unlock the door of your dream home.
Tips to Save Money for Buying a House
With a sound financial plan and a handful of smart strategies, it will lead to a well rounded income source that can act as your down payment to your dream home.
Here we explain the strategies one by one:
Know your target: Set a Savings goal
Each goal has an end peak as it’s destination. Be keen in your research to select a suitable area where you might want your home. It will help in figuring out a sum worthy of the down payment and will be our target.
A higher down payment amount will result in lower mortgage loan and monthly payments. Keep your expense expectation real. Assume a 20-25% of the purchase price.
Pro tip – Beware of down payment amount that can break your bank.
Formulate a budget
Track your expenses and spending sources. Make a budget to See where you can cut back on your expenses. Be careful while looking through expenditure and note it down for a few months.
Look for budget hacks to come up with a savings plan. Popular methods like the 50/30/20 rule (50%-needs, 30% wants and 20%savings) or zero based budgeting( every single cent is recorded) are useful hacks that can help you in saving for the down payment.
Pro tip – Download budget tracking apps in your phone for an easy tracking system.
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Cost Cutting Challenge
Now that you have identified your spending habits, make sure that you start cutting down the unnecessary costs. It is time for you to become a penny pincher.
Here are some hacks to help you cut down your cost:
- Reduce recurring costs – Cut down on unnecessary costs or bills like phone, TV. Reduce those costs by cutting down subscriptions.
- DIY your way – Decide to cook at home more often, have movie nights instead of going out.
- Enjoy Frugal fun – Keep yourself entertained by enjoying cheap date nights, free museum admission days and look for cheap entertainment centres.
- Say No – Resist the temptation of impulsive shopping. Only buy items that you need.
Maximize your Savings
Every penny counts. Every small contribution makes a difference. Here are some ways that can help you maximize your savings:
- Automate savings – Direct your paychecks to your savings account. As the saved money will be out of sight, out of mind, it will be saved.
- High Yields saving account – Select a savings account that gives a high interest on your savings. I would recommend saving up your money in multiple savings account.
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Additional streams of income
Look for additional sources of income. Freelancing, online gigs can help in the summation of money. Monetize your skills and get paid. This will help in saving up for the down payment.
Sell up the stuff that is no longer useful for you. Sell non-useful items at online Facebook market places. Declutter your life.
Welcome free money
Save up the money gifted by family members and friends. If they are willing to help, take them up on that.
Many employers have the scheme of retirement saving programs. Utilize those schemes and save that money for the down payment.
Government assistance programs
Depending upon your location and income, you might be eligible for financial grants or aid. Look into those programs and research about that. Many schemes are available for first time homebuyers. Utilize those schemes for your benefit.
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Patience and persistance
This is a long marathon. Processes like these are bound to take time, it is a slow process. Celebrate your wins and do not get upset by setbacks. Saving is a part of your journey to achieve your long term goal.
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Final thoughts
Buying your house is an investment for your future. It is a dream that you want to make happen. Follow these tips and you are bound to succeed in getting your dream home.
Pro tip – Seek financial advise from a financial expert as it will be quite easier if you formulated a sound financial plan. It will ease out your way towards your destination.
We have given all the pointers on how to save money to buy a house. From hacks and tips, to plans and schedules, we have covered all the bases and hope that it answers your question of how to save money to buy a house.Be patient and persistent. Enjoy the process and before you know it, you will have the keys to your dream home. Happy saving!!
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